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India’s FTA rush: Kerala’s farmers and fishworkers stand to lose



20 December 2007, Thiruvanathapuram


Thiruvanathapuram: A consultation on ‘India’s FTA negotiations and implications for Kerala’ organised in the city yesterday called for caution from New Delhi in the current rush to sign Free Trade Agreements (FTAs). Fishworkers Unions, farmers groups, researchers and civil society organisations participated in the meeting, organised by the Thiruvanathapuram based Kerala Swatantra Matsya Thozhilala Federation (KSMTF) in collaboration with the Mumbai based research group Focus on the Global South. Speakers at the meeting included Farmers Relief Forum leader AC Varkey and KSMTF President T Peter.

Background to the meeting:

The ongoing crisis in the World Trade Organisations (WTO) Doha round of trade talks and the market access ambitions of big business has necessitated a shift to bilateral and regional FTAs. Whereas in 2000 there were only 130 FTAs scattered across the world, by October 2007 their number had mushroomed to 430. India is the process of negotiating and implementing some 27 FTAs.

India’s first FTA was the India-Sri Lanka Free Trade Agreement (ISFTA) signed in 2000. While the FTA did result in increased bilateral trade, farmers in Kerala were at the receiving end. Imports of duty free black pepper from Sri Lanka increased from 1385.3 tonnes in 1999-2000 to 4865 tonnes in 2004-05. This resulted in a free fall in local prices from 21,502 rupees per quintal to 6644 rupees in the corresponding period. Suicides among pepper farmers in the Wayanad region also saw a sharp rise during this period. Many farmers are still reeling from the ISFTA and continue to be in a debt trap despite some attempts by the Kerala Government to address the agrarian crisis.

Much of the political campaign of groups such as Farmers Relief Forum in Wayanad is to stop the confiscation of farms and houses of farmers by banks, said AC Varkey

Since India slashed tariffs in 1996-7, agricultural imports across the country have spiraled; 270% increase in volume and 300% in value terms. Participants at the meeting noted that while middle class consumers have benefited through cheaper prices of imported commodities, a huge section of consumers who are also producers (India has some 300 million small farmers with less than 2 acres of land) have been given short shrift.

Threat to fishing community:

New FTAs such as the European Union (EU)-India Trade and Investment Agreement, India-Thailand FTA and the ASEAN-India Regional Trade and Investment Area were identified as posing threats to the fishing community in Kerala.

The EU-India FTA is in the third round of negotiations and covers areas such as agriculture, fisheries, goods, investment and services and is India’s most ambitious and challenging FTA till date. With 27 countries, the EU is one of the largest trading blocks and controls 1/3rd of global trade. Both negotiating teams have agreed that the minimum coverage of the FTA will be 90% of all trade.

‘We have heard from sources in the Commerce Ministry that fish species such as mackerels, sardines, mullets, anchovies and flounders, the means of livelihood for the traditional fishworkers will be imported under minimum tariffs. We will be denied a just price for our catch as import of subsidised fish would cause local prices to plummet’, said T Peter.

Indian negotiators expect that these FTAs will provide Indian exporters access to foreign markets. While tariffs are low in the EU, they are several other import restrictions such as domestic subsidies, non-tariff barriers (NTBs), trade rate quotas (TRQs), Sanitary and Phytosanitary (SPS) measures and tariff peaks to protect their markets.

Peter suggested that ‘We should spread awareness across the country on the disastrous effects of the ISFTA. The ASEAN-India regional FTA which involves the 10 South East Asian countries will have a bigger adverse impact on us. Many of ASEAN exports such as fish, copra, coconut oil, desiccated coconut, natural rubber and pepper are also produced in India’.

KSMTF plans to contact other unions and various social movements in the state and across the country to question the FTA policy of the Commerce Ministry. Follow-up activities planned by the group include producing pamphlets, raising the issue in the next session of the Kerala Assembly (in February 2008) and working in solidarity with fishworkers and farmers groups in the ASEAN and EU.

For more information contact
T Peter: + 91-9447429243.
Benny Kuruvilla: + 91-9873921191.}